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Argentine Political Outlook (Oct-06-15)

Oct-06-15 - by Rosendo Fraga

1. Less than three weeks to go before the
elections, uncertainty continues to dominate the forecasts. Recent polls show
that Daniel Scioli, the candidate of the FPV, keeps the first place with 40% of
the votes, i.e. slightly more than that obtained in the open primaries (38.6%).
What is not clear is whether he will reach 40%. If so, there will be no second
round if he has 10 or more points ahead of the second candidate but if he gets
one vote less than the 40% there will be a second round, whatever the
difference may be. The provincial candidacy of Aníbal Fernández and the obvious
tensions with Kirchnerism are the causes that have prevented the pro-government
candidate from growing. The 45% - percentage from which there can be no second
round - today does not seem to be within his reach. Mauricio Macri, the
candidate for Cambiemos, has a couple of points less than the total obtained by
this party in the primaries. The impact of the allegations against Niembro -
plus others - and the lack of a vigorous speech towards Kirchnerism are the
causes of this decline. For this reason, today Macri is about 12 points below
Scioli. He will try to resume the initiative this week in the unveiling of a
monument to Perón in the Buenos Aires
city along with marked figures of Peronist unionism, Moyano and Venegas and
Duhalde from the political entourage. Massa
has been the beneficiary of this situation as polarization has failed so far.
He has 2 points more than in the open primaries - taken from Macri-, so the
difference with the Cambiemos candidate, which was 10 points, now has been
reduced to 6. Massa
will try to impose what most surveys show but few publish: If there is a
runoff, he has more chances to win over Scioli. The debate does not seem to have
altered this situation.

2. Meanwhile, the electoral campaign
hardens with an exchange of complaints as the election approaches. The assets
tax return of the candidates is in the center of the dispute. Scioli's shows
strong inconsistencies, with a 1,000% increase in his patrimony and a notorious
undervaluation of his ranch "La
Nata". But in an ultra-fast trial of the Buenos Aires criminal justice in a case of
illicit enrichment, he was acquitted last week, without the Prosecutor
appealing, thus closing the case. In the case of his candidate for Vice
President (Zannini) - whose number two (Liuzzi) has just been acquitted for a
second time in a case of corruption-, his tax return includes having received a
loan from Cristóbal López, which is illegal as he is a contractor of the State
for public works and the game industry. Macri's tax return faces serious
questions due to discrepancies with the one presented this year in the city of Buenos Aires and for
including the loan of money to a public works contractor (Nicolás Caputo), who
is also his friend. As for Massa, his tax return
only includes assets; he argues that the increase in value is due to the Buenos Aires valuation
increase, but also the ruling coalition has opened a case in the federal court
that is heard by judge Lijo. The cases of corruption, less than 70 days before
the end of the term, show that the ruling party maintains strong control over
justice in its various fields.

3. For his part the President strikes back
on all terrains, using Aníbal Fernández as her main political spokesman. In her
address before the UN Assembly and without a real basis as the Prosecutor of
the case (Marijuán) said, she accused the U.S. Government of protecting the
controversial head of counterintelligence who worked with Nisman (Stiuso). The Buenos
Aires Governor candidate accused the U.S. Government of "endangering the
bilateral relationship" with his attitude and the Foreign Affairs Minister
(Timerman) quoted the Washington Ambassador in Buenos Aires. In relation to the claims of
the Governor of Salta (Urtubey) in the United States - as a spokesman for
Scioli - that it is necessary to reach an agreement with the holdouts, the
Chief of Staff by order of Cristina replied that "the negotiation
conditions will not be changed", with which there could be no agreement.
The new head of the UIA (Kaufman) criticized the law passed by members who
create a bicameral Committee to investigate companies that received benefits
during the military Government, statements refuted by Aníbal Fernández in stark
terms. For his part, Alicia Kirchner said that after December 10 Cristina
"will be consulted on an ongoing basis". She did it after Scioli said
that he would not be a President of transition, as expressed by human rights
leaders (Carlotto and Bonafini). Also the Administration seems resolved to
respond to the statements that the Scioli's wife (Rabolini) is making on her
husband's exercise of power.

4. In addition,
Congress keeps on approving all bills of the ruling coalition as if government
would not change soon. The Senate will approve the bill by which the UN
resolution on regulation of the holdouts becomes a public law, and the Lower
House is expected to give the final approval after the election. For this
reason, to agree with the creditors the new Government will have to repeal this
law, as well as the "lock law" of 2005 and the sovereign payment law of 2010,
all with a Congress that will have no majority. The Lower House will give
approval to the 2016 budget that limits the freedom of action of the next
President. Among the rules that have come to Congress in recent days is the new
social security scheme for artists, early retirement of conscripts who were in
the Falklands, the bill that makes all social programs into law and creates an
autonomous body to administer them, the 2015-2035 satellite program and
agreements for two new directors of the Central Bank until 2021. For its part
the AFSCA is preparing to deliver more channels of digital television groups
allied to the ruling party. But central issue for the Government, at a time
when the dollar exit grows is to reach an agreement with China to renew the
swap, whose amount has been exhausted, but this just would be resolved at a
meeting on the occasion of the meeting of the IMF in Lima that takes place this
week.

5. To conclude:

a) Less than three weeks to go for the
elections, it's not clear that Scioli can reach 40% but today has more than 10
points over Macri, whose difference over Massa has been reduced.

b) As the election gets closer, the campaign
becomes more negative, with verbal attacks and crossed allegations around the
candidates' tax return statements, without the debate changing things.

c) The president attacks all fronts with
criticism to the US, Scioli's spokesmen and the business sector, as Aníbal
Fernández is her keynote spokesman.

d) Less than 70 days to go before Cristina's
end of term, Congress keeps on passing bills in the Executive power at an
unprecedented speed in these circumstances.